loft at 8-10 Warren Street is first resale of 2008 new development, but is still smiling
against the trend
You might bet that resales would be challenging in an At Peak Manhattan condominium conversion of a real loft building, particularly if you recall the exercise I went through in my March 5 data dump: 27 Manhattan lofts sold in 2007 + recently, which can be briefly be summarized for present purposes as 2007 new development sales being (somewhat) over-represented in the Loser column of Nov 2009-March 2010 resales. I have not done a similar table for lofts with both 2008 sales and 2010 sales, but I strongly suspect that 2008 new development sales would be over-represented in the Loser column again. All of which is a long way to introduce the Manhattan loft #3W at 8-10 Warren Street (named evocatively, if awkwardly, Trinity-Stewart Condominium), which recently sold at a 6.4% premium over the original sponsor sale on April 28, 2008.
The recent sale was October 18, though it took a relatively long time (for these modern days) for the deed to be filed on November 16. Before getting into the details of this “2,157 sq ft” floor-through (but not full-floor) loft that sold for $2.6mm, I want to take a look at this new development project. The Trinity-Stewart Condominium might be the loft conversion with the single best market timing of any contemporaneous conversion I am aware of. Journey with Manhattan Loft Guy to those thrilling days of yesteryear….
better to be lucky than good?
To simplify those fun times, there were a couple of things going on regarding new developments in 2007 into 2008: there was the general market froth in terms of buyer demand and pricing heading toward the coming-but-when? peak; and there was a fierce competition among developers to get their projects finished, as contractors were generally over-extended, with projects delayed because there were so many projects under way.
Especially for any developers who recognized that the froth could not last, the pressure to complete projects while the buyers were still biting must have been intense. Anyone who feared that The Market would not just soften, but correct, would want to be completed before buyers figured that out. Those developers with the greatest appetite for risk would also want to be among the very last to complete before a market change, in order to participate in The Absolute Peak (i.e., not to leave a single dollar on the table).
Of course, they would recognize that they had limited control over one of the two key variables, and no control over the other: getting to market depended on contractors finishing the (darn) project, and they might exert some influence there; but developers were as powerless (and ignorant) as anyone else about when The Bubble (if they recognized conditions as such) would deflate.
The Trinity Stewart Condominium is a five-story base of two existing loft building converted into 2 residential lofts on each floor above the street, and a new tier of five floors slightly set back from the street-side curtain wall, with full-floor lofts on each. Similar to how Porter House at 66 Ninth Avenue and the Keystone Lofts on the next block at 38 Warren Street were extended and converted in the very different market conditions of 2002-03.
Between April 25 and May 15, 2008 StreetEasy shows they sold 8 units at 8-10 Warren Street, then sold two more by July 1, 2008; our data-base shows one other sale on July 1, accounting for 11 of 14 units.
Those three ‘missing’ units have never sold and have not come back to the sales market, so I wonder whether a developer relation is living in one, and if they successfully rented two others (click the <Rentals (5)> button the Streeteasy link). If they have a positive carry on those three ‘missing’ units, this is a very successful conversion indeed; if not, then maybe not.
Recall that the overall Manhattan real estate market peaked with sales made in (around) the First Quarter of 2008. These guys sold 11 new lofts from April 25 to July 1, getting their money out at very close to peak pricing for at least 78% of their units (and possibly getting cash flow on two others and otherwise using the last).
As I said above, they may have intended to sell into The Peak, but had no control over market dynamics and only limited control over the contractor delays that upset the well-laid plans of many developers in those days. Better to be lucky than good, indeed!
but is this really The Peak?
Have you figured out the flaw in my logic about peak pricing? #3W sold on May 1, 2008 (for redundancy fans everywhere: very close to The Peak) but the contract was signed on June 7, 2007 … about two quarters too early to be totally peak pricing. I am not going to go through each contract (too tedious even for Manhattan Loft Guy!), but the last of the original sales was #2E on July 1, 2008 on a contract signed on … (wait for it) … April 19, 2008. I.e., THE Peak.
#2E got $2,011,043 for “1,932 sq ft” with that April 2008 contract, while #3W originally sold at $2,443,800 for “2,157 sq ft” from a June 2007 contract. That’s $1,041/ft at the peak and $1,132/ft for 2-quarters-before-peak.
i am not going to worry too much more about whether this new development actually got totally peak pricing and is, therefore, the most successful conversion in the Class of 2008. But if I come across another new development with the following characteristics I will re-visit whether any developer was more lucky (good?) than the Trinity-Stewart guys. To beat them, another candidate would have to have contracts signed in 2008 for nearly all units and (probably) would have to have closings not later than first quarter of 2009, because after that some new development buyers with pre-Lehman commitments were bailing out.
meanwhile, back in #3W …
#3W was not a hard sell this year. It came to market on July 14 at $2.7mm (that time of year that some overly calendar-dependent people think is the wrong time to sell a loft) and found a contract by August 3 at $2.6mm. (Take that, OCD people!) Check the pix for the handsome brick walls and antique (wide) pine floors. (I do wish there’d been a picture of that “custom-designed walk-in closet [recently featured in ‘Real Simple’ magazine”].)
The western of the two original buildings has footprints of “2,157 sq ft” (the eastern building is slightly smaller at “1,932 sq ft”). #3W is that classic-of-classic Long-and-Narrow floor plans, with windows only front and back, side-by-side bedrooms in the back, a string of plumbing on one long side (kitchen, laundry, master bath), and enough plumbing flexibility to have a second bath on the opposite Long wall.
I don’t know if there were elevators in the two original buildings, pre-conversion, but the developers just might deserve credit for putting the elevator in exactly the right place to enter the west building: close to the middle of one Long wall, at the beginning of the living area, and (most importantly, but subtly?) just past the kitchen. A lot of people do not like walking in to a loft in the kitchen; this layout avoids that aesthetic problem by a few degrees.
Did I mention that #3W is the first re-sale in the building? Perhaps the sponsor will get rid of those renters and any family members in the three ‘missing’ units and bring them to market soon….
a note about monthlies
The #3W listing refers to “incredibly low carrying costs!”, a description that earns that exclamation point: this “2,157 sq ft” unit in a condominium that has been operating for two years already has relatively low taxes at $1,197/mo and ridiculously low common charges of $375/mo. Granted, there are no amenities other than a common roof deck, but those are uncommonly low common charges.
© Sandy Mattingly 2010